Nigerian Power Minister Warns Private Energy Generation Could Cost N750 Per kWh Due to Fuel Prices
Nigeria’s Minister of Power, Adebayo Adelabu, has warned that generating electricity privately using petrol or diesel could cost up to N750 and N950 per kilowatt-hour (kWh), respectively, due to soaring fuel prices. These figures sharply contrast with the current N209/kWh being paid by Band A customers through the national grid.
Speaking at a recent event in Lagos, Adelabu underscored that while some customers have protested against the Band A tariff, the cost of generating power independently using fuel is far steeper. “Customers know that it is still cheaper compared to generating their own power with petrol or diesel,” the minister noted.
Adelabu took aim at media reports that portrayed the increased revenue of power distribution companies (Discos) as an added burden on consumers. He described the situation as a simple reallocation of resources, explaining that funds previously spent on petrol and diesel are now directed towards securing a more reliable electricity supply. “It is not an additional burden. It is just a reallocation from what they used to spend on fuel. Now they are paying to enjoy a good power supply,” he said.
The minister cited stark contrasts in spending, recalling that in 2023, while the power sector generated N1 trillion in revenue, Nigerians spent an eye-watering N16.5 trillion on petrol and diesel to run generators. “But today, with a more stable supply, many no longer spend on fuel. We charge N209 per kWh for Band A, but to generate the same power with petrol at today’s rate of N1,000 per litre would cost N750 per kWh, and diesel around N915,” Adelabu explained.
He urged electricity consumers to support ongoing reforms in the sector, cautioning against reverting to costly and inefficient fuel-powered generators. “We are adopting commercialisation to ensure investors see a return on their investments. If consumers are sincere, they know which option is better,” he added, likening the national power grid to a “beautiful bride” with far more to offer than private fuel generation.
Adelabu reaffirmed his commitment to increasing Nigeria’s power generation to 6,000 megawatts by the end of the year, despite concerns over persistent grid collapses, which remain a potential stumbling block to this ambitious target.
